TORONTO, Aug. 28, 2014 /CNW/ - Saskatchewan's housing affordability
improved in the second quarter of 2014 amid a rebound in the housing
market following poor weather that stifled activity this past winter,
according to the latest Housing Trends and Affordability Report issued today by RBC Economics Research.

"Saskatchewan's housing market had a convincing snapback in Q2 from the
winter slowdown with resales jumping to a new record-high of 4,500
units for this period of the year," said Craig Wright, senior
vice-president and chief economist, RBC. "Strong activity more than
made up for a sluggish first quarter."

RBC notes that year-to-date statistics suggest that the housing market
is on pace to match 2012, which logged the strongest annual number of
units sold on record at 13,900. Much of the gain in the second-quarter
took place in Saskatoon, a market that RBC says has been flying high
since 2011.

The RBC housing affordability measures, which capture the province's
proportion of pre-tax household income needed to service the costs of
owning a home at market values, fell across all housing categories in
the second quarter (a decrease in the measure represents an improvement
in affordability). RBC's affordability measures for Saskatchewan
declined by 1.3 percentage points to 38.9 per cent for two-storey
homes, by 1.0 percentage points to 35.1 per cent for bungalows and by
0.8 percentage points to 24.4 per cent for condominiums.

The RBC Housing Affordability Measure, which has been compiled since
1985, is based on the costs of owning a detached bungalow (a reasonable
property benchmark for the housing market in Canada) at market value.
Alternative housing types are also presented, including a standard
two-storey home and a standard condominium apartment. The higher the
reading, the more difficult it is to afford a home at market values.
For example, an affordability reading of 50 per cent means that
homeownership costs, including mortgage payments, utilities and
property taxes, would take up 50 per cent of a typical household's
monthly pre-tax income.

It is important to note that RBC's measure is designed to gauge
ownership costs associated with buying a home at present market values.
It is not a representation of the actual costs incurred by current
owners, the vast majority of whom have bought in the past at
significantly different values than those prevailing in the latest
period.

Housing affordability in the province improved across the board in the
second quarter, with two-storey homes and condos reaching their most
attractive levels since late 2009. RBC's affordability measures for
B.C. fell between 0.9 and 2.0 percentage points. Still, owning a home
at market price in an area such as Vancouver continued to be very
difficult for an average household to afford.

Escalating prices in the province were largely taken in stride by
Alberta homebuyers in Q2 as lower mortgage rates and solid growth in
household incomes provided offset. Affordability in the province
improved modestly with RBC measures easing between 0.2 and 0.9
percentage points.

The big housing market story in Manitoba was a surge of homes being
offered for sale with new listings growing to levels almost 14 per cent
above where they were a year ago. RBC's affordability measures fell
between 0.5 and 1.5 percentage points but remained close to long-run
averages, suggesting that affordability likely plays a neutral role in
home buying decisions in the province.

Housing affordability changed very little in Ontario in the second
quarter and homebuyers did not appear to be overly concerned by the
fact that affordability remained somewhat stretched for single-family
homes. Lower rates were the main factor contributing to marginal
declines in RBC's measures for Ontario, which edged lower between 0.1
and 0.2 percentage points.

Quebec's housing market activity, which had been falling since early
2012, stabilized in Q2. Home resales rose modestly and the supply of
homes for sale grew. Second quarter affordability measures for the
province eased for all housing types - between 0.9 and 1.8 percentage
points. This improvement in affordability likely helped stabilize the
market at the margin in the latest quarter.